Taxes, Financing, Infrastructure Major Challenges to Tanzania Competitiveness

WEF Tanzania Global Competitiveness Index 2017-2018

The World Economic Forum (WEF) has published its Global Competitiveness Index 2017–2018, covering 137 economies.

The report measures national competitiveness, defined as the set of institutions, policies, and factors that determine the level of productivity.

The ranking is based on WEF’s Global Competitiveness Index (GCI) that tracks the performance of the countries on 12 pillars of competitiveness.

Sub-Saharan Africa’s
On average, sub-Saharan Africa’s competitiveness has not changed significantly over the past decade: while a little ground was gained between 2011 and 2015, it has been partially lost again over the past two years.

Only four countries, namely Ethiopia, Senegal, Tanzania, and Uganda, have improved their performance for five consecutive years since 2010.

Africa’s recent decline in overall competitiveness is reflected in subdued growth rates: only 1.4% in 2016 and a modest 2.6% projected for 2017.

Continued deterioration in the macroeconomic environment is behind most of this year’s fall in competitiveness.

Average inflation grew to double digits in 2016 and remains above 10%.

Public finances are still being affected by past slower global growth and commodity prices, which—although picking up somewhat—remain well below the commodity price levels of the 2005–14 period.

As a consequence, African public revenues fell from an average of 26.5% of GDP in 2006 to 17% in 2016, and many countries are running deficits.

In just two years public debt has risen from an average of 31.5% to 42.5% of GDP, and 22 of the 31 countries assessed by the GCI this year report higher debt than last year.

Tanzania
Tanzania ranked 113rd this year with a GCI of 3.71, representing a minor improvement compared to its 116th position last year and similar GCI.

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From a list of 16 factors, respondents to survey -mostly business executives – were asked to select the five most problematic and rank them from 1 (most problematic) to 5.

The most problematic factors for doing business, WEF explains, are access to financing, tax rates, inadequate supply of infrastructure, inflation, and corruption.

Others issues include bureaucracy, policy instability, inadequately educated workforce, and crime.

WEF
The World Economic Forum is a Swiss non-profit foundation whose mission is to improve the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas.

The Global Competitiveness Index seeks to provide guidance, inform future-oriented solutions, and shed light on trade-offs that policymakers will face going forward.